UUP - Fed Pivot Or Pushback? Markets Poised For Tense Policy Finale To 2023 | Benzinga
Markets are poised for what, perhaps, could be the crunch moment in 2023. Will equities be given the green light to rally into 2024, pushing the U.S. dollar lower? Will it be pivot or pushback from the Federal Reserve at its final policy meeting of 2023.
The Pivot: This is the scenario in which the Fed says it believes it has done enough on interest rates increases with inflation back under control and changes its stance from mildly hawkish, to mildly dovish — thus cementing market expectations that rate cuts could come early in 2024.
Equity markets would likely rally, as they have all year on signs the Fed was coming towards the end of its rate-hike cycle. The SPDR S&P 500 ETF Trust (NYSE:SPY) mirrored the index it tracks all year and, like the S&P 500 has rallied 21% in 2023. The Invesco QQQ Trust (NYSE:QQQ) an ETF which tracks the NASDAQ has done even better, up 50%.
The Pushback: In this scenario, the Fed keeps rates on hold at the current 5.25%-5.5%, but remains mildly hawkish, ...